Nvidia CEO: 'Computer graphics will never be the same again'

After a two-year wait, Nvidia (NVDA) on Monday offered an in-depth look at its next-generation graphics cards, which the company claims will “reinvent computer graphics.”

When the chipmaker’s new GeForce RTX line of graphics cards launches on September 20, starting at $499, computer graphics should see a huge boost in sharpness and realism. The GeForce RTX cards’ biggest draw: the Turing chip, which does on-the-fly “ray tracing,” an intensive computer graphics technique that creates a photorealistic scene by tracing light and accurately rendering reflections in light — shading objects and shadows to a degree previous graphics chips could not. Ray-tracing previously required a supercomputer to crunch all that data to render a scene. That took some time. But with Turing, Nvidia is promising ray tracing in real-time, so there’s no wait.

Over two dozen companies have announced support for Nvidia’s GeForce RTX platform, including Adobe (ADBE), Pixar, EA (EA), and Autodesk (ADSK).

“Computer graphics will never be the same again,” Nvidia CEO Jensen Huang said onstage during the Turing demonstration at the annual Gamescom conference in Cologne, Germany.

Nvidia on Monday showed off a video project called Project Sol with real-time ray tracing, to stunning effect.

Although Huang’s commentary sounds hyperbolic, he may well be right. As it stands now, the vast majority of computer graphics are rendered with a more traditional technique that uses “shaders” to handle different levels of light, color, and darkness. Huang compared different scenes in side-by-side comparisons on Monday between traditional shading and real-time ray-tracing via Turing, indicating a huge leap in photorealism for computer graphics.

The Turing chip demo comes days after Nvidia reported earnings for the second quarter of its 2019 fiscal year. The chipmaker disclosed better-than-expected earnings of $1.76 per share on revenues of $3.12 billion — up 40% year-over-year — compared with Wall Street analysts’ estimates of $1.66 earnings per share on revenues of $3.1 billion. However, the chipmaker also reported lower-than-expected guidance for its fiscal third quarter and mediocre sales of graphics chips to cryptocurrency miners, with “cryptocurrency-specific product revenue” coming in at just $18 million versus Nvidia’s estimated $100 million.

Although cryptocurrency was a financial drag on Nvidia for the second quarter, the chipmaker’s other bets are paying off. Second quarter revenues for several of its other business segments, including PC gaming, data centers and automotive, all beat estimates. Nvidia’s new graphics could also represent an inflection point for gaming, with cutting-edge graphics that could translate to a significant revenue boost for the chipmaker in the short- to medium-term.

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JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.